Finance

Financial analyst Peter Berezin thinks that it’s still a good idea to hold on to stocks, at least for the next year or so. While recession fears are high, he and other investors speculate that inflation will go down rapidly within the next few months as the pandemic eases up, keeping recession at bay. However, when inflation flares up again around early 2024 and the US Federal Reserve System follows suit by raising rates, he says that investors should start thinking about their exit plans. Read full article here

Although most famous for its investment banking business, Goldman Sachs has been looking to diversify its clientele for years. One of their forays into consumer banking is Marcus, an online loan and deposit platform catering to the middle class. Although overshadowed by their investment banking successes, Marcus has performed well for Goldman; it boasts 10 million customers and over 100 billion USD in deposits, despite a small marketing budget. They’re now planning to become their customers’ primary bank by launching digital checking accounts this year. Read full article here

Despite the cryptocurrency hype, trends show that investors define wealth as the value of their holdings in fiat currency (e.g. AUD, USD, GBP). Bitmex is a platform where one can bet on the Ethereum-USD exchange rate; they want their users to treat crypto as equivalent to real currency. To encourage this idea, people trading in Bitcoin have an advantage — they get bitcoins at a lower rate. But the users are not jumping on the opportunity, due to their preference for seeing their wealth in terms of a fiat currency like USD. Read full article here

The fine wine industry aged rather well even amidst the global pandemic, reporting record sales in 2021. But that’s not the only reason investors from Generation Z — loosely defined as 25 and under — are adding fine wine to their portfolios. Compared to alternatives such as crypto, whisky, and art, investors find that fine wine has a relatively accessible entry point that makes it easy to get into while also providing long-term stability within portfolios. Read full article here

For the rich, a dollar is not a dollar; a dollar is worth more than a dollar thanks to what financial pundit Jerry Goodman calls “supermoney.” Supermoney is made up of assets that have been financialized, meaning they can be used in the betting economy we call the stock market. Supermoney’s worth is valued at its future potential value through the stock market. The wealthy’s money is more valuable because it is invested in stocks, whereas the average person’s dollar is only worth a dollar. Read full article here

The trade sanctions on Russia have forced it to ponder using another currency in international trade. Talks with China have Russia planning to use the yuan, but these talks haven’t yet translated into widespread use. The yuan’s adoption has been slow; in 2013, it accounted for 1% of Russian-Chinese trade, and by 2020, it had only increased to 6.3 percent. Russian and Chinese companies are still free to choose a different currency in business and seem more likely to deal in euros than in yuan. Read full article here

Through data from France, Austria, Switzerland, and the UK, Christensen, Lopez, and Mussche determined that the U.S. Treasury could issue 50-year bonds without significant cost increases (currently, the longest-term U.S. Treasury bond is 30 years). The cost of issuing 50-year bonds is similar (France and Austria, both E.U. countries) or perhaps even cheaper (Switzerland and the U.K.), as these long-term bonds have lower yields. Ultimately, the authors concluded that should the federal reserve introduce 50-year bonds, they would see an almost negligible 0.2% cost difference increase to the 30-year bonds. Read full article here

The Federal Reserve has been blamed by many for the rampant wealth inequality in the US, primarily because of “quantitative easing” (QE) — creating money seemingly out of thin air. But while they may have a role in wealth inequality, it’s more nuanced than it seems. Japan, the Eurozone, and the United Kingdom all did more QE than the US yet have less wealth inequality. Thus, instead, it’s put forth that central banks don’t have as big of an effect on wealth inequality when compared to fiscal policies. Read full article here

As museums begin selling NFTs of their works, one question looms large: do the laws governing copyright protection cover these digital reproductions? The related legislation is convoluted and lacks international coherence. Observers will readily conclude that these museums are selling high-priced counterparts of a low-value collector memento, or even a fractional stake in the original piece. Museums preserve cultural memoirs and believe that long-term value supersedes short-term gain. However, whether we like it or not, our history is being shaped by artefacts in combination with the opinions of the masses. Read full article here

An enlightening dive into the logistics behind America’s addiction to speeding. One highlight was the mention of the 85th percentile rule: an archaic principle used to help determine speed limits, wherein the speed limit is set through observation of how quickly 85% of motorists travel on that road under a free-flow environment. Although it doesn’t take a doctorate in mathematics to see the flaws in this methodology, it is based on a sound assumption: “drivers respond to the road they are given”. Read full article here